The brand of your credit card may not be as cut-and-dried as it should be. It’s possible that while your card says one thing (for instance, you think you’re signing up with a small, wholesome bank), it’s actually ‘underwritten’ by one of the bigger banks. Here’s what you need to know about credit cards and the murky world of underwriters.
In fact, some of Australia’s most popular credit cards are underwritten by other issuers and banks, which can dictate the features, terms and conditions you have with any card.
Add to that the fact that these connections have an impact on competition between issuers, and it is clear there is so much more to credit cards than what we hear or see everyday.
Although you rarely have to deal with an underwriting issuer, understanding the deals between credit card companies helps you figure out exactly where you stand and how to better negotiate with your card company.
Underwritten Credit Cards: What Is Affected?
The influence underwriting organisations have are usually to do with the actual features of the credit cards in question.
An independent issuer who uses ANZ as their underwriter, for example, would be likely to offer the same complimentary extras and similar payment terms and conditions as ANZ credit cards.
In other words, if the hypothetical issuer above had a card with complimentary international travel insurance, it would basically be the same insurance you would get with an ANZ card.
In this way, underwriting basically lays the foundations for the credit cards of other issuers.
But there is also some impact on features like the interest rates and fees (though the degree of influence varies).
The biggest example of this influence comes in the form of balance transfers: if you have a card underwritten by an issuer you want to switch to, for example, the introductory offer will not apply, and vice versa.
Similarly, other introductory offers and signup promotions, such as rewards bonuses, may not be applicable if you are switching between issuers that have an underwriting partnership.
What Underwriting Means For Credit Card Competition
Agreements between companies lead to less competition between them, whether it is in the contracts they sign or an unsaid courtesy.
So who are the issuers with the biggest stakes in the Australian credit card market?
It probably comes as no surprise that the Big Four Banks are at the top. All four have connections to smaller providers, such as credit unions, as well as popular independent issuers and their own products.
Westpac credit cards are part of the Westpac Group, including St.George, Bank of Melbourne, BankSA and Westpac. Westpac used to underwrite Virgin Money credit cards before Citi took over in 2009. In June 2022, NAB acquired Citi and now issues the Citi-branded credit cards. In the move, NAB also took over Diners Club, which was formerly owned by Citi.
NAB is now also the credit provider for these previously Citi-backed cards, making it the second-largest credit card provider in Australia:
How To Find Out If Your Credit Card Is Underwritten By Another Company
Figuring out the connections between your current issuer and others is particularly important if you want to take advantage of balance transfer offers, but it may be useful to know even if you are happy with your provider.
Fortunately, it is often easy enough to figure out: most of the time underwriting information is listed in the credit card terms and conditions.
But if you are with a small or independent issuer and cannot find details of any underwriting, you can always call them to check if an underwriting company is involved.
It is also a good idea to call potential issuers and check with them that you will be eligible for any introductory deals, so that you know you will not be disappointed with a new card.
While the logo on your card and statements may give away your actual issuer, other details and features could be hidden beneath the surface if an underwriter is involved.
But understanding these partnerships and keeping an eye out for them means you will always know where you stand.
Pauline is a personal finance expert at CreditCard.com.au, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.
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